The Home Office plans to buy hundreds of properties for asylum seekers could make “the acute shortage of housing” even worse.

The Government is to purchase up to 800 properties in an attempt to re-house the 35,000 asylum seekers currently languishing in hotels, at a cost to taxpayers of £5.4million every day. The number has risen by almost 6,000 since the election despite Labour’s manifesto pledge to “end asylum hotels”.

It follows Labour’s decision to scrap the previous government’s policy of placing asylum seekers in large sites such as disused prisons and military bases – even though almost £80 million had already been spent on this scheme.

The Local Government Association, which represents councils across the country, has warned that providing homes for asylum seekers risks making it harder to provide homes for existing residents. In a submission to Parliament, the association said: “Given wider housing pressures, asylum and resettlement also affects all councils’ capacity to source accommodation both for new arrivals and for all those in housing need in their local area.”

It stressed that councils want to help the Government solve the problem but warned: “Given increased demand and the acute shortage of housing across the country, this requires a national, regional and local approach.”

Deputy Prime Minister Angela Rayner last week announced that councils will be ordered to build 370,000 properties a year, even if it means using green belt land.

And the Sunday Express revealed that London councils moved 15,280 households to other local authority areas in just one year due to a shortage of homes, with some going as far as County Durham.

Conservatives say Labour is failing to cut asylum numbers because it scrapped the previous government’s plan to remove asylum seekers to Rwanda, even though £715 million had been spent on the scheme.

And last week the most senior civil servant in the Home Office suggested the Rwanda policy would be operating today if Labour had not won power.

Home Office Permanent Secretary Sir Matthew Rycroft told a Commons inquiry: “If the election outcome had been different, I am very confident that Home Office civil servants would be busy operationalising the scheme to Rwanda. That would have been our job in that circumstance.”

Shadow Home Secretary Chris Philp said: “Labour scrapped the only deterrent before it even got started and rolled out the red carpet to criminal gangs trading in human misery. Their failure to control our border has led to an 18 per cent increase in small boat crossings since they came into power, and the British people are paying a very real price.

“The Home Secretary needs to wake up, take notice of what her Permanent Secretary has said, and get a grip on this crisis before it spirals further out of control. Labour should hang their heads in shame. They have left our borders unprotected, without the Rwanda deterrent.”

The Home Office has identified 800 potential properties across the country that could be bought either outright or on a “long leasehold” basis to house asylum seekers.

Louise Gittins, Chair of the Local Government Association, said: “We are keen to work with government both to improve the current system and work towards longer term change. Both need to deliver a fairer dispersal of asylum seekers around the country, an understanding of shared roles and responsibilities to keep people safe and supported and the funding needed to deliver this, and a place-based approach to wider cohesion and housing challenges.”

It comes after Labour scrapped the previous government’s plans to house asylum seekers in larger sites including a former prison, HMP Northeye in Bexhill-on-Sea, which the Home Office bought in September 2023 for £15.4 million.

Asylum seekers have also been moved off the Bibby Stockholm barge in Dorset, a scheme which cost £34 million, and plans to house asylum seekers at RAF Scampton in Lincolnshire have been scrapped after spending £27 million.

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The previous government also spent £2.9 million on plans to use a RAF Linton-on-Ouse, a disused airbase in North Yorkshire, before the plan was axed while the Tories were still in power.

Home Office data shows 13,000 asylum seekers are staying in hotels in London while another 4,000 are in the North West of England, including more than 1,200 in Manchester. Around 1,180 asylum seekers are in hotel accommodation in Birmingham.

A Home Office spokesperson said: “We have inherited enormous pressures in the asylum system and remain absolutely committed to ending the use of hotels to ensure value for money.

“We have identified a range of sites that we are narrowing down to a handful of suitable properties that will enable us to exit hotels sooner.”

Conservative MP Greg Stafford said: “Labour must act urgently to deliver a clear and effective strategy to stop illegal crossings and reduce reliance on costly and unsuitable temporary accommodation.”